Monster Energy Drink Boosts Hansen Natural's Q3 Profit, But Misses Estimates

11/5/2009 6:44 PM ET

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(RTTNews) - Thursday, beverage company Hansen Natural Corp. (HANS: News ) reported a higher profit for the third quarter, as revenues rose 8.1% from last year, on sustained strong sales of Monster Energy drinks. However, Hansen shares lost more than 9% in after-hours session, as results were below the Street view.

The Corona, California-based company's third-quarter net income increased to $56.5 million or $0.60 per share from $52.4 million or $0.54 per share a year ago.

On average, seven analysts polled by Thomson Reuters estimated earnings of $0.63 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the third quarter increased 8.1% to $307.9 million from $285.0 million for the third quarter of 2008. Analysts expected revenues of $309.19 million for the quarter.

Gross sales for the quarter, which adds promotional and other allowances to net sales, increased 9.2% to $355.0 million from $325.2 million in the same quarter last year.

Segment wise, revenue from DSD segment increased 9.6% to $282.4 million from $257.7 million in the year-earlier quarter. Revenue from the company's warehouse segment declined to $25.6 million from $27.3 million in the third quarter of 2008.

Gross profit, as a percentage of net sales, for the third quarter was 53.6%, compared to 52.4% for the comparable quarter last year.

Operating expenses for the third quarter increased to $72.1 million from $67.6 million in the third quarter of 2008. Distribution costs, as a percentage of net sales, were 4.3% for the third quarter, compared with 5.5% in the same quarter last year.

Operating income for the third quarter increased 13.6% to $92.9 million from $81.8 million in the prior-year quarter.

Rodney Sacks, chief executive officer of Hansen Natural, said revenue growth was due to sustained strong sales of Monster Energy drinks, which continue to grow in excess of the category and achieve further gains in market share. "We are encouraged by the positive sales numbers reported by Nielsen for the five weeks ended September 26, 2009, which reflect that energy drink sales both in the important convenience and gas channel as well as the grocery channel, on a year-on-year comparable basis, grew for the first time since March 2009," Sacks said.

The transition to certain Coca-Cola bottlers and new Anheuser-Busch distributors at the end of last year continues to be beneficial as the company's national market share in both the convenience and gas and grocery channels is now higher than it was prior to the transition. Monster Energy's market share in the convenience and gas channel increased to 30% for the first time during the five weeks ended September 26, 2009, the company said.